Palisades Collections LLC v. Shorts, No. 08-2188.

CourtU.S. Court of Appeals — Fourth Circuit
Writing for the CourtWilliams
Citation552 F.3d 327
Decision Date16 December 2008
Docket NumberNo. 08-2188.
PartiesPALISADES COLLECTIONS LLC, Plaintiff, v. Charlene SHORTS, Defendant-Appellee, v. AT & T Mobility LLC; AT & T Mobility Corporation, Counter-Defendants-Appellants. Chamber of Commerce of the United States, Amicus Supporting Appellants.
552 F.3d 327
PALISADES COLLECTIONS LLC, Plaintiff,
v.
Charlene SHORTS, Defendant-Appellee,
v.
AT & T Mobility LLC; AT & T Mobility Corporation, Counter-Defendants-Appellants.
Chamber of Commerce of the United States, Amicus Supporting Appellants.
No. 08-2188.
United States Court of Appeals, Fourth Circuit.
Argued: October 30, 2008.
Decided: December 16, 2008.
Order Denying Rehearing En Banc January 15, 2009.

[552 F.3d 328]

ARGUED: Dan Himmelfarb, Mayer Brown, L.L.P., Washington, D.C., for Appellants. Christopher James Regan, Bordas & Bordas, Wheeling, West Virginia, for Appellee. ON BRIEF: William M. Connolly, Michael P. Daly, Drinker Biddle & Reath, L.L.P., Philadelphia, Pennsylvania; Jeffrey M. Wakefield, Christina S. Terek, Flaherty Sensabaugh & Bonasso, P.L.L.C., Charleston, West Virginia; Evan M. Tager, Charles A. Rothfeld, Jack Wilson, Mayer Brown, L.L.P., Washington, D.C., for Appellants. Jonathan Bridges, Susman Godfrey, L.L.P., Dallas, Texas; William R.H. Merrill, Susman Godfrey, L.L.P., Houston, Texas, for Appellee. Robin S. Conrad, Amar D. Sarwal, National Chamber Litigation Center, Inc., Washington, D.C.; John H. Beisner, Jessica Davidson Miller, Charles E. Borden, Richard G. Rose, O'Melveny & Myers, L.L.P., Washington, D.C., for Amicus Supporting Appellants. William David Wilmoth, Karen Elizabeth Kahle, Steptoe & Johnson, P.L.L.C., Wheeling, West Virginia; Joseph Anthony Curia, III, Steptoe & Johnson, P.L.L.C., Charleston, West Virginia, for Palisades Collections, LLC, on the merits.

Before WILLIAMS, Chief Judge, and NIEMEYER and KING, Circuit Judges.

Affirmed by published opinion. Chief Judge WILLIAMS wrote the opinion, in which Judge KING concurred. Judge NIEMEYER wrote a dissenting opinion.

WILLIAMS, Chief Judge:


This case presents an issue of first impression —whether a party joined as a defendant to a counterclaim (the "additional counter-defendant") may remove the case to federal court solely because the counterclaim satisfies the jurisdictional requirements of the Class Action Fairness Act of 2005 ("CAFA"), Pub.L. 109-2, 119 Stat. 4 (codified in scattered sections of Title 28 of the United States Code). We hold that neither 28 U.S.C.A. § 1441(a) (West 2006) nor 28 U.S.C.A § 1453(b) (West 2006 &

552 F.3d 329

Supp.2008) permits removal by such a party.

I.

On June 23, 2006, Palisades Collection L.L.C. ("Palisades"), a Delaware corporation, initiated a collection action in West Virginia state court against Charlene Shorts, a West Virginia resident, to recover $794.87 in unpaid charges plus interest on Shorts's cellular phone service contract.

The contract, originally entered into with AT & T Wireless Services, Inc., provided that Shorts would be charged a $150.00 early termination fee if she defaulted on her payment obligations before the end of the contract. In October 2004, Cingular Wireless L.L.C. ("Cingular") merged with AT & T Wireless Services, Inc. to become AT & T Mobility L.L.C. ("ATTM"). Before her contract term expired, ATTM determined that Shorts was in default on her account, terminated her service, and charged her the early termination fee. In June 2005, ATTM assigned its right to collect on Shorts's default to Palisades.

After Palisades filed the collection action in state court, Shorts filed an answer denying the complaint's allegations. Shorts also asserted a counterclaim against Palisades, alleging "unlawful, unfair, deceptive and fraudulent business act[s] and practices," in violation of the West Virginia Consumer Credit & Protection Act (the "Act"), as codified at W. Va.Code Ann. § 46A-6-104 (LexisNexis 2006). (J.A. at 8). Almost one year later, the state court granted Shorts leave to file a first amended counterclaim joining ATTM as an additional counter-defendant.1 The amended counterclaim alleged that Palisades and ATTM violated the Act by "systematically contract[ing] for, charg[ing], attempt[ing] to collect, and collect[ing] illegal default charges in excess of the amounts allowed by West Virginia Code § 46A-2-115(a) and impos[ing] unconscionable charges in violation of § 46A-2-121." (J.A. at 26.)

Shorts filed a motion for class certification, seeking to represent a class of individuals under similar contracts with Cingular and ATTM, but before the state court could rule on that motion, ATTM removed the case to the United States District Court for the Northern District of West Virginia. In response, Shorts filed a motion to remand, arguing that ATTM could

552 F.3d 330

not remove the case because it was not a "defendant" pursuant to the general removal statute, 28 U.S.C.A. § 1441. The district court granted Shorts's motion and remanded the case to state court, concluding that ATTM could not remove the case to federal court because: (1) "it [was] not a `defendant' for purposes of removal under § 1441," Palisades Collections L.L.C. v. Shorts, No. 5:07CV098, 2008 WL 249083, at *5, 2008 U.S. Dist. LEXIS 6354, at *13 (N.D.W.Va. Jan. 29, 2008), and (2) CAFA does not create independent removal authority that would allow ATTM to "circumvent the long-standing requirement that only a true defendant may remove a case to federal court," id. 2008 WL 249083, at *10, 2008 U.S. Dist. LEXIS 6354, at *29.

We granted ATTM permission to appeal, and we possess jurisdiction to review the district court's remand order under 28 U.S.C.A. § 1453(c)(1).

II.

ATTM makes two principal arguments. First, in its notice of removal, ATTM contended that the case is removable under the general removal statute, 28 U.S.C.A. § 1441.2 Second, on appeal, ATTM now argues that, even if § 1441 does not permit removal by additional counter-defendants, § 1453(b), added by CAFA, constitutes a separate removal power authorizing ATTM to remove. ATTM also makes an additional argument that, if neither § 1441 nor § 1453(b) permits removal by additional counter-defendants, then we should realign the parties to make ATTM a traditional defendant.

ATTM's first two arguments raise questions concerning removal to federal court and issues of statutory interpretation, which we review de novo. Payne ex rel. Estate of Calzada v. Brake, 439 F.3d 198, 203 (4th Cir.2006) (questions concerning removal); United States v. Abuagla, 336 F.3d 277, 278 (4th Cir.2003) (issues of statutory interpretation). In resolving this case, we are mindful that "federal courts, unlike most state courts, are courts of limited jurisdiction, created by Congress with specified jurisdictional requirements and limitations." Strawn v. AT & T Mobility L.L.C., 530 F.3d 293, 296 (4th Cir. 2008). And, we are likewise cognizant that "[w]e must not give jurisdictional statutes a more expansive interpretation than their text warrants, but it is just as important not to adopt an artificial construction that is narrower than what the text provides." Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546, 558, 125 S.Ct. 2611, 162 L.Ed.2d 502 (2005) (citation omitted).

"When interpreting statutes, we start with the plain language." United Seniors Ass'n, Inc. v. Social Sec. Admin., 423 F.3d 397, 402 (4th Cir.2005) (internal quotation marks omitted). We also recognize that "[s]tatutory construction is a holistic endeavor," Koons Buick Pontiac GMC, Inc. v. Nigh, 543 U.S. 50, 60, 125 S.Ct. 460, 160 L.Ed.2d 389 (2004), and that "[t]he plainness or ambiguity of statutory language is determined by reference to the language

552 F.3d 331

itself, the specific context in which that language is used, and the broader context of the statute as a whole," Robinson v. Shell Oil Co., 519 U.S. 337, 341, 117 S.Ct. 843, 136 L.Ed.2d 808 (1997). See also United States v. Heirs of Boisdore, 49 U.S. (8 How.) 113, 122, 12 L.Ed. 1009 (1850) ("In expounding a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy."). "A provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme—because the same terminology is used elsewhere in a context that makes its meaning clear, or because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law." United Sav. Ass'n of Tex. v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 365, 371, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988) (citations omitted).

A.

Before turning to the issues raised in this appeal, an overview of the relevant jurisdictional statutes is appropriate to place the following discussion in context.

The general removal statute, 28 U.S.C.A. § 1441, provides that "any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or the defendants, to the district court of the United States for the district and division embracing the place where such action is pending." § 1441(a) (emphasis added). Section 1446 of Title 28 of the United States Code establishes the procedures for removal of a case under § 1441. See 28 U.S.C.A. § 1446 (West 2006).

Through CAFA, Congress expanded federal diversity jurisdiction by amending 28 U.S.C.A. § 1332 to give federal district courts original jurisdiction of "any civil action in which the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs, and is a class action in which—(A) any member of a class of plaintiffs is a citizen of a State different from any defendant." 28 U.S.C.A. § 1332(d)(2) (West 2006).

In addition to amending § 1332, Congress also added 28 U.S.C.A. § 1453(b), which provides:

A class action may be removed to a district court of the United States in accordance with [28 U.S.C. §] 1446 (except that the 1-year limitation under section 1446(b) shall not apply), without regard to whether any defendant is a citizen of the State in which the action is brought, except that such action may be removed by any defendant without the consent of all defendants.

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    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • July 31, 2015
    ...to remove under § 1441(a). See Westwood Apex v. Contreras, 644 F.3d 799, 805–06 (9th Cir.2011) ; Palisades Collections LLC v. Shorts, 552 F.3d 327, 332 (4th Cir.2008) ; Deutsche Bank Nat. Trust Co. v. Baxter, 969 F.Supp.2d 1337, 1342 (N.D.Ala.2013) ; Moss Land & Mineral Corp. v. Fid. & Cas.......
  • Colo. Bankers Life Ins. Co. v. AT Denmark Invs., ApS, No. 5:20-CV-409-D
    • United States
    • United States District Courts. 4th Circuit. Eastern District of North Carolina
    • March 18, 2021
    ...Co., 883 F.3d 384, 390 (4th Cir. 2018); see Common Cause v. Lewis, 956 F.3d 246, 252 (4th Cir. 2020); Palisades Collections LLC v. Shorts, 552 F.3d 327, 333-34 (4th Cir. 2008); Md. Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d 255, 260 (4th Cir. 2005); Dixon v. Coburg Dairy, Inc., 369 F.3d......
  • Liberty Bank & Trust Co. v. Danley (In re Danley), Case No. 15–80960–WRS
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Middle District of Alabama
    • July 8, 2016
    ...just as plainly allows any “party” to remove a case on the basis of bankruptcy jurisdiction. See Palisades Collections LLC v. Shorts, 552 F.3d 327, 333 (4th Cir.2008) (comparing § 1441(a) to § 1452(a) ); First Nat'l Bank of Pulas ki v. Curry, 301 F.3d 456, 463 (6th Cir.2002) (same). Liberty......
  • United States ex rel. Carter v. Halliburton Co., No. 12–1011.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • March 18, 2013
    ...silence, we presume that Congress is aware of the legal context in which it is legislating.” Palisades Collections LLC v. Shorts, 552 F.3d 327, 334 n. 4 (4th Cir.2008) (quoting Progressive W. Ins. Co. v. Preciado, 479 F.3d 1014, 1017–18 (9th Cir.2007) (internal alterations omitted)). Thus, ......
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233 cases
  • Fed. Nat'l Mortg. Ass'n v. Morris, Case No. 2:15–cv–0798–JEO.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • July 31, 2015
    ...to remove under § 1441(a). See Westwood Apex v. Contreras, 644 F.3d 799, 805–06 (9th Cir.2011) ; Palisades Collections LLC v. Shorts, 552 F.3d 327, 332 (4th Cir.2008) ; Deutsche Bank Nat. Trust Co. v. Baxter, 969 F.Supp.2d 1337, 1342 (N.D.Ala.2013) ; Moss Land & Mineral Corp. v. Fid. & Cas.......
  • Colo. Bankers Life Ins. Co. v. AT Denmark Invs., ApS, No. 5:20-CV-409-D
    • United States
    • United States District Courts. 4th Circuit. Eastern District of North Carolina
    • March 18, 2021
    ...Co., 883 F.3d 384, 390 (4th Cir. 2018); see Common Cause v. Lewis, 956 F.3d 246, 252 (4th Cir. 2020); Palisades Collections LLC v. Shorts, 552 F.3d 327, 333-34 (4th Cir. 2008); Md. Stadium Auth. v. Ellerbe Becket Inc., 407 F.3d 255, 260 (4th Cir. 2005); Dixon v. Coburg Dairy, Inc., 369 F.3d......
  • Liberty Bank & Trust Co. v. Danley (In re Danley), Case No. 15–80960–WRS
    • United States
    • United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Middle District of Alabama
    • July 8, 2016
    ...just as plainly allows any “party” to remove a case on the basis of bankruptcy jurisdiction. See Palisades Collections LLC v. Shorts, 552 F.3d 327, 333 (4th Cir.2008) (comparing § 1441(a) to § 1452(a) ); First Nat'l Bank of Pulas ki v. Curry, 301 F.3d 456, 463 (6th Cir.2002) (same). Liberty......
  • United States ex rel. Carter v. Halliburton Co., No. 12–1011.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • March 18, 2013
    ...silence, we presume that Congress is aware of the legal context in which it is legislating.” Palisades Collections LLC v. Shorts, 552 F.3d 327, 334 n. 4 (4th Cir.2008) (quoting Progressive W. Ins. Co. v. Preciado, 479 F.3d 1014, 1017–18 (9th Cir.2007) (internal alterations omitted)). Thus, ......
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